After less than two years at his post, Laxman Narasimhan is stepping as CEO of Starbucks. Brian Niccol, who currently serves as Chairman and CEO of Chipotle, will take over the head leadership role starting Sept. 9, 2024. Starbucks CFO Rachel Ruggeri will act as interim CEO to support the leadership transition.
Narasimhan initially joined Starbucks after the company embarked on a “global search” for a new leader. Bringing nearly 30 years of experience from consumer goods, retail, grocery, restaurant and ecommerce industries, Narasimhan initially conducted a five-month “immersion experience” in which he traveled to work with Starbucks employees in more than 30 stores, manufacturing plants and in support centers around the world. Although he was named incoming CEO on Sept. 1, 2022, he officially assumed the role on March 20, 2023.
During his tenure, Narasimhan supported Starbucks’ supply chain innovation, helped store operations and improved the partner (employee) experience, according to a company statement. For nearly a year, the company has focused on actualizing its reinvention plan, which focused on evolving the Starbucks brand, strengthening its digital capabilities, unlocking efficiencies and reinvigorating partner culture.
“On behalf of the board, I want to sincerely thank Laxman for his contributions to Starbucks, and his dedication to our people and brand,” said Starbucks Board Chair Mellody Hobson. “In the face of some challenging headwinds, Laxman has been laser focused on improving the business to meet the needs of our customers and partners. We all wish him the very best and know he will do great things in the future.”
However, experts believe that speedy executive shakeups indicate trouble behind the scenes. Starbucks has had its mix of positive ventures, such as testing new inclusive store environments and expanding its reusable cup initiative.
“The iconic and omnipresent Starbucks brand that Howard Schultz and his team built has lost its luster and brand equity over the past ten years,” noted Brandon Rael, Strategy & Operations Leader at Kyndryl on LinkedIn. “With economies of scale comes efficiencies and reach. Yet the brand has strayed from its successful strategy of offering customers transporting European café experiences and, in the process, has essentially commoditized itself.”
Starbucks initially built its brand around highly localized and immersive community experiences. However, it recently has leaned heavily into store formats that focus on speed and efficiency. Niccol’s most recent post at Chipotle, which he has been in since 2018, hint at Starbucks’ continued focus on efficiency and corporate culture.
During his time at Chipotle, Niccol focused on people and culture, brand, menu innovation, operational excellence, and digital transformation to drive growth and value creation. Chipotle’s revenue nearly doubled, profits increased nearly sevenfold, and the stock price increased by nearly 800% during his leadership, all while retail team member wages increased and benefits expanded.
“Brian is a culture carrier who brings a wealth of experience and a proven track record of driving innovation and growth,” Hobson said. “Like all of us at Starbucks, he understands that a remarkable customer experience is rooted in an exceptional partner experience. Our board believes he will be a transformative leader for our company, our people, and everyone we serve around the world.”
Before joining Chipotle, he served as Chief Executive of Taco Bell. Before becoming CEO he held roles including Chief Marketing and Innovation Officer, and President. He also served in leadership roles at Pizza Hut, another division of Yum! Brands. He began his career in brand management at Procter and Gamble.
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